'Kick the tyres' before buying China

published 6 December 2013

David Cameron's first state trip to China was controversial even before he got on the plane, but all might be forgiven if the prime minister brings home the bacon in terms of trade and investment deals, says the Daily Mirror. To that end, Premier Li Kequiang's promise of Chinese cash to help build the High Speed 2 rail link would certainly "make the £46bn price tag easier for UK voters". Cameron declares himself an admirer of "the high-speed revolution" in China, says Oliver Wright in The Independent.

But any Chinese involvement in HS2 will be "highly controversial given safety concerns" following the Wenzhou crash that killed at least 40 people in 2011. "For many Chinese, the accident confirmed what they had always suspected," says Angus Foster on BBC.co.uk: that too many corners were cut in the rush to win the trophy of the world's longest high-speed network.

The bottom line about Chinese investment is that "not all deals are equal", says the FT. One reason why Manchester reckons it has stolen a march on Liverpool with its plans for a giant industrial park is that it has secured the cash from a state-backed construction firm and the country's biggest bank. Merseyside, by contrast, has been pushing for its own £10bn Chinese-backed regeneration scheme for three years, "without a brick being laid".

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The reason may be a failure to kick the tyres. One of the "driving forces" behind the Liverpool scheme was Sam Wa, a company chaired by Stella Shiu, "whose partners in other ventures include an Iranian pomegranate juice manufacturer" and a US investment advisor who recently settled with the SEC over allegations of fraud. Shiu herself changed her name after a Hong Kong court declared her bankrupt in 2008. On a visit to her HQ last week, there was no sign of the "large mining and trading conglomerate" that had seduced Merseyside. Just "a small dusty office" with locked glass doors, against which were propped faded banners welcoming the "Wirral Council Leaders".

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